4 IT Companies Where Investor Carl Icahn Is Stirring The Pot

Carl Icahn Planting Stakes In IT World

Billionaire activist investor Carl Icahn has been shaking up corporate America for decades. Known to some as the corporate raider, Icahn hasn't been afraid to publicly ruffle the feathers of some of the biggest technology companies in recent years during his attempts to get more value for shareholders, from publicly complaining about stock pricing to Apple CEO Tim Cook to suing Dell Technologies and calling Dell CEO Michael Dell a "dictator.”

The 82-year-old billionaire has been in the public eye for decades, including a recent stint as a special adviser to President Donald Trump on regulatory reform. Icahn, who Forbes estimates has a net worth of approximately $17 billion, has been shifting his eye toward the technology sector in recent years by spending billions in the IT industry. CRN breaks down four IT companies that Icahn is looking to reshape.

Icahn's $1.7 Billion Dell Stake And His Fight Against Dell Going Public

Icahn and Dell Technologies founder and CEO Michael Dell (pictured) first clashed in 2013 when Icahn unsuccessfully sued Dell over its $24.4 billion bid to become a private company because he viewed the offer as too low. He called the 2013 plan a "desperate debacle" and the Dell CEO a "dictator" in an open letter. Michael Dell called Icahn "a bad guy" who lies and has "no ethical boundaries."

Five years later, the battle has begun again. This week Icahn sued Dell in regard to the company's bid to become a public entity, alleging that Dell isn't disclosing financial information to shareholders relating to its VMware stock swap plan. Icahn owns a 9.3 percent stake in DVMT tracking stock, representing approximately 18.5 million shares that were purchased for a total of $1.71 billion. Icahn wrote a scathing public letter to DVMT shareholders urging them to vote against the proposal, going to far as saying that Michael Dell was creating a "fear campaign" to force shareholders to approve the bid.

"It is clear to me that Dell and Silver Lake have followed Machiavelli's advice to the letter,'It is better to be respected than loved, but better still to be feared than respected,'" said Icahn in an open letter to shareholders. Icahn will likely keep up the fight until the critical shareholder vote in December in which Dell needs shareholder approval to become public.

VMware CEO Pat Gelsinger

Invests Hundreds Of Millions In VMware

Earlier this year, Icahn bought a sizable stake in virtualization leader VMware, which is majority-owned by Dell Technologies, to the tune of approximately 2.27 million shares. Icahn told CNBC in May that he invested hundreds of millions in VMware but wished he had captured more stake in the software company.

"I wish I had a bigger position than I have, but it's a sizable position," said Ichan. "It's in the hundreds of millions of dollars, but it could be more but the stock just got away from me."

The move to buy millions of shares in VMware and the DVMT tracking stock suggests he has hopes on a potential deal between Dell and VMware, just not on the current proposal bid. Dell confirmed it has met with investment banks to explore the option of a traditional IPO if shareholders reject its bid to go public through the stock swap with VMware. VMware currently has a market capitalization of $58.12 billion.

Icahn Changes Xerox

Arguably Icahn's biggest technology shakeup this year was his successful battle with Xerox, which shifted leadership of the company by ousting former CEO Jeff Jacobson as well as five board members.

Icahn is a major shareholder in Xerox and began publicly criticizing Xerox and CEO Jacobson in December 2017, saying members of Xerox's board "have their heads in the sand." In January, Xerox and Fujifilm announced a $6.1 billion merger under which Xerox would cede a 50.1 percent ownership stake to Fujifilm. The deal would have seen Xerox sold to Fujifilm for a cash dividend to shareholders of $2.5 billion. Xerox would then own 49.9 percent of the new company. Icahn came out swinging with fellow investor Darwin Deason, suing the company in a proxy fight and saying that the Fujifilm offer undervalued Xerox. Deason and Icahn own a combined 15 percent stake in Xerox. Fujifilm then sued Xerox, accusing the company of caving in to Icahn and Deason.

After the dust was settled, the merger was canceled and Icahn loyalist John Visentin took over as Xerox CEO this year. As part of the restructuring, the company reported in October that it cut 900 people from its global workforce in the third quarter. However, Fujifilm recently won an appeal in a New York state court that had blocked it from pursuing a merger with Xerox. Fujifilm said it hopes to renew merger talks with Xerox, which means Icahn most likely will again become front and center in the discussions ahead.

Icahn Reshapes Conduent

Icahn is one of the single largest shareholders in Conduent, owning a 9.4 percent stake in the company with approximately 19.8 million shares. Xerox created Conduent when it spun off its business services division in January 2017. Conduent, formerly known as Affiliated Computer Services, was purchased by Xerox for $6 billion from founder and activist investor Darwin Deason. Three members of Icahn Capital currently hold seats on Conduent's board of directors.

Since its split from Xerox, Icahn helped lead the way for Conduent to complete divestitures of $1 billion in assets aimed at creating a new corporate alignment of what it called its core business. Conduent has sold its commercial vehicle operations business, off-street parking business, human resources consulting business and its local government services business. All told, the company said it expects $600 million from those deals. Conduent touts itself as a digital platform company for business and government. In October, Conduent acquired health-care software provider Health Solutions Plus.